President Lee Signals Possible Curbs on Loan Extensions for Multi-Home Owners: "Still Can't Make Up Your Mind?" (Comprehensive)

Back-to-back messages on social media: "Is it fair to extend loans for multiple-home owners?"
"Granting even financial benefits is a problem," he points out
"Succeeding by holding out means the failure of real estate policy on multiple-home owners"<

Yonhap News Agency

President Lee Jaemyung, who has signaled his determination to normalize the real estate market by scaling back tax benefits such as temporary suspensions and exemptions from heavier capital gains tax for owners of multiple homes and rental housing business operators, has now said that it is necessary to restrict the extension of existing loans for such multi-home owners. This is understood as a call to increase the financial burden on those who have maintained investment or speculative multiple-home holdings by repeatedly extending their loans as a "holdout strategy."

On the 13th, President Lee posted a message on X (x, formerly Twitter) titled "How should we handle existing loans for owners of multiple homes when they reach maturity?" and pointed out, "Even for the sake of resolving the national task of stabilizing housing prices, it is problematic to grant financial benefits for the acquisition of multiple homes for investment or speculative purposes that are not for owner-occupied residential use."

Currently, the government limits the maximum amount of mortgage loans for the purchase of a single home for one household in land transaction permit zones such as Seoul to 600 million won. In these areas, when a person who already owns two or more homes purchases an additional home, the loan-to-value (LTV) ratio is set at 0%, effectively banning mortgage loans, and even a one-home owner cannot obtain a new mortgage unless the existing home is disposed of. Under these circumstances, criticism has steadily been raised that if owners of multiple homes continue to extend the maturity of loans secured by their existing properties, it is unfair to people who are trying to purchase homes for the first time.

In this context, President Lee said, "We have given them years of opportunities, even cutting capital gains tax, yet these owners of multiple homes have held out without reducing their holdings. Is it fair to grant them additional benefits by extending their loans even after they mature?" He stressed, "Those who follow the rules and respect social order must not be placed at a disadvantage compared with those who break the rules in pursuit of unjust gains."

He also delivered a warning message to owners of multiple homes who are clinging to so-called "holdout" tactics. President Lee wrote, "To those who still think that if they just hold out, things will work out, I say this: the Republic of Korea is moving toward becoming a normal society where common sense and order are restored." He went on, "The core of a normal society is ensuring that decent people who follow the rules do not suffer losses, and that people who break the rules cannot profit," adding, "In a democratic society, fairness is the driving force of growth and development."

Regarding this, the presidential office said, "The intention is that there needs to be a review of the current situation in which loans granted in the past to owners of multiple homes are being extended as a matter of routine," and added, "Together with the financial sector, we will identify the actual status of loans to owners of multiple homes and swiftly review improvement measures where necessary."

Yonhap News Agency

Through an additional social media (SNS) message posted the same day, President Lee again asked, "Is the (real estate) market normal right now? Is the government acting unfairly right now?" and pointed out that owners of multiple homes turning down capital gains tax reduction opportunities and instead succeeding by simply holding out would signify the failure of real estate policy aimed at curbing ruinous real estate speculation.

President Lee stated, "We cannot allow this country, where everything from the normalization of our perpetually undervalued stock market to the recovery of the economy and a just social order is gradually returning to normal, to continue racing in reverse toward a 'lost 30 years' only in the area of real estate," and added, "If policymakers have the will and public support is secured, it is possible not only to solve problems but also to guide the market toward a desirable state through the powers of regulation, taxation, and supply-and-demand control."

He continued, "A great leap forward through new policies is important, but the top priority task for the survival of the Republic of Korea is to normalize all abnormalities," and stressed, "We already know what will happen to the country if we leave real estate, which is hurtling toward a lost 30 years, unattended. There is no government that can beat the market, but there is also no market that can beat the government." He then added, "The counterweight that gives meaning to this seemingly contradictory statement is the normality of the situation and the legitimacy of government policy."